Decision of the Chairman of the Authority

No. (63) of 2014 dated 27/3/2014

Regarding the Conditions and Procedures for Licensing the Market Maker Activity

for Companies Specified in Item (b) of Article (27) of the Capital Market Law

Chairman of the Egyptian Financial Supervisory Authority

Having reviewed the Capital Market Law issued by Law No. (95) of 1992 and its Executive Regulations and the decisions issued to implement them;
and the Central Depository and Registration of Securities Law issued by Law No. (93) of 2000 and its Executive Regulations;
and Law No. (10) of 2009 concerning the regulation of supervision over markets and non-banking financial instruments;
and Presidential Decree No. (191) of 2009 regarding the provisions organizing the Egyptian Exchange and its financial affairs;
and Presidential Decree No. (192) of 2009 issuing the Statute of the Egyptian Financial Supervisory Authority;
and Minister of Investment Decision No. (293) of 2007 adding the market maker activity to the activities of companies operating in the securities field;
and the Authority's Board of Directors Decision No. (56) of 2010 regarding the expertise and competence rules for practicing the market maker company activity;
and the Authority's Board of Directors Decision No. (37) of 2014 regarding the financial solvency standards for companies licensed to practice the market maker activity;
and the Authority's Board of Directors Decision No. (40) of 2014;

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Decided

(Article One)

Licensing for the companies specified in item (b) of Article (27) of the Capital Market Law to practice the market maker activity shall be subject to the following controls:

1. More than 50% of its shares in companies operating in the securities field must be subject to the supervision and oversight of the Authority.

2. Allocating a dedicated amount not less than ten million Egyptian pounds for each security for which it acts as a market maker.

3. Separating the market maker activity from other activities it conducts and maintaining separate accounts and records for this activity.

(Article Two)

The companies referred to in the preceding article, in order to obtain a license from the Authority to practice the market maker activity, shall submit an application to the Authority accompanied by the following:

1. The company's shareholding structure and a recent copy of the commercial register for each of the securities companies in which it holds shares.

2. The administrative unit responsible for practicing the market activity, as per the company's organizational structure.

3. Documentation confirming that the personnel managing the activity meet the expertise and competence conditions according to the Authority's Board of Directors Decision No. (56) of 2010.

4. Operational manuals for the market activity, detailing the continuous cycle, allocations, and records specific to the activity.

5. Internal control procedures to prevent the leakage of information that comes to the company's knowledge during the practice of the market maker activity.

6. Documentation confirming that no administrative measures or penalties have been issued by the Egyptian Exchange or the Authority during the six months preceding the application, except for the measure mentioned in item (a) of Article (31) of the Capital Market Law, provided the company submits documentation proving it has removed the grounds for it.

7. A commitment to comply with increasing the value of the insurance deposited by the company with the Authority as determined by the Board of Directors.

8. Documentation confirming the settlement of all financial obligations to the Authority.

9. A commitment from the company's Managing Director to fulfill the following requirements within a maximum of three months from the date of license issuance.

If the activity commences and these requirements are not fulfilled, the license shall be considered null and void:

(a) Providing the mechanisms and technical equipment for automated linkage with the Egyptian Exchange and the Central Depository and Registration of Securities Company, and documentation confirming the availability of independent connection lines from both the Egyptian Exchange and the Central Depository and Registration of Securities Company according to the technical specifications set by each.

(b) Fulfilling all membership requirements with the Egyptian Exchange and with Egypt Clearing, Depository and Registration Company as a marketing member.

(c) Providing compliance with the technological infrastructure and information security systems stipulated in the Chairman of the Board of Directors Decision No. 1005 of 2013.

(Article Three)

The Authority shall issue its decision on the license application within a maximum of sixty days from the date of submitting complete documents, and in case of rejection, the decision must be reasoned.

Interested parties must be notified of the Authority's decision within fifteen days from its issuance date.

(Article Four)

The Authority shall have the right to revoke the license issued to the company in case the company violates any of the provisions regulating the activity, as well as in cases it deems necessary for the stability of transactions and to prevent harm to the market or its participants.

(Article Five)

This decision shall be published in the Egyptian Gazette and on the websites of the Authority and the Egyptian Exchange, and shall take effect from the day following its publication in the Egyptian Gazette.

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Chairman of the Authority
Sherif Samy

Egyptian Financial Supervisory Authority
Electronic

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Egyptian Financial Supervisory Authority
Smart Village, Building 15 - B
Km 28, Cairo-Alexandria Desert Road
Giza Governorate, Postal Code: 12577

Telephone: (02) 35370040
Fax: (02) 35345332
Email: info@efsa.gov.eg
Website: www.efsa.gov.eg